Statement by Benon
V. Sevan, Executive Director of the Office of the Iraq Programme, prior to
his fourth mission to Iraq, 1-17 August 2000

It has been 10 years since the Security
Council imposed sanctions on Iraq but only three and a half years since the
first oil was shipped out of Iraq under the terms of the oil-for-food
programme.Since that
first oil shipment, on 10 December 1996, around 1.9 billion barrels have
been exported earning just under $29 billion.

Under the terms of relevant Security
Council resolutions, some $16 billion of this money is available for the
humanitarian programme in the 15 governorates in the centre and south of
Iraq with another $4 billion for the three northern governorates.This is by far the largest humanitarian programme ever administered
by the United Nations.

For the centre/south of Iraq, the
Government of Iraq is responsible for entering into contracts and submitting
them to the United Nations for approval by the Security Council’s 661
Committee.As of 30 June,
the Office of the Iraq Programme (OIP) had submitted $14 billion worth of
humanitarian contracts to the Committee.So far the Committee has approved $11.9 billion and placed a further
$1.25 billion on hold.

In the oil sector, OIP has submitted to
the Committee, 2,382 contracts worth $1.29 billion.Of these one billion dollars worth have been approved and $282
million have been put on hold by the Committee.

This is a very different picture from
the first three six-month phases of the programme, when Iraq was limited to
selling $2 billion worth of oil in each phase with most of the humanitarian
allocation being spent on food and health supplies.Starting in 1998 the ceiling on oil revenue was lifted and finally
removed, enabling Iraq to make large scale purchases in other sectors.Revenue in phase VII which ended in June 2000 was
$8.28 billion.

Coping with the rapid growth in the size
and complexity of programme has stretched the capacity of the United
Nations’ 70 staff in New York and 570 international staff (including
agencies and programmes) in Iraq.In resolutions 1284 (1999) and 1203 (2000) the Security Council
authorised important procedural improvements designed to streamline the
administration of the programme.Some of these have taken effect in the past few weeks.

They include the establishment of lists
agreed between the Committee and the OIP for the food, health, education and
agriculture sectors whereby contracts for supplies on these lists need not
be submitted to the Committee for approval.So far some 558 contracts have been dealt with in this manner with a
total volume of just over $1 billion.

In the oil sector, the Committee agreed
on a list of parts and equipment which would be approved by a group of
experts.OIP established that
group which began work in July and is responsible both for contracts related
the list and for contracts which would go to the Committee for its
consideration.In the few
days since the list was approved, the group of experts has approved four
contracts with a value of around $800,000.

Inevitably, the rate of approvals has
far outstripped the pace of supplies arriving in Iraq - except for food and
health where around 75 per cent of supplies approved by the Committee have
arrived.For agriculture 44 per
cent of approved supplies have arrived, for education arrivals are 25 per
cent, for electricity 34 per cent and for water and sanitation 23 per cent.In the oil sector arrivals are around $338 million or 34 per
cent of the amount approved.

It adds up to around $8.35 billion
arrived in Iraq with another $4.2 billion of supplies and equipment in the
“pipeline” for a total of $12.55 billion.Then there is the $1.6 billion the Committee has put on hold, plus
more than 200 contracts for which additional information is being sought.

Even with the recent improvements in New
York and the new leadership in Iraq and improved observation methods in
Iraq, the oil-for-food programme is no substitute for the resumption of
normal economic activity in Iraq.However,
there is no doubt the situation for many in that country is significantly
better than it was when the first oil was exported under the programme at
the end of 1996.